Passed by the Singapore Parliament on 10 March 2017, the Companies (Amendment) Act 2017 significantly amended the Companies Act (Cap 50) (the “Act”) to:
- reduce compliance costs and administrative burdens on companies;
- increase transparency in terms of ownership and control of business entities;
- boost Singapore’s competitiveness as a business hub; and
- improve Singapore’s competitiveness as a choice venue to conduct international debt restructuring by improving Singapore’s corporate rescue and restructuring processes.
The amendments will be implemented in phases – some of the amendments took effect on 31 March 2017, while the next two phases of the amendments will take effect within the first half of 2017 and early 2018.
Table of Key Amendments
The table below is a summary of the key amendments, with the previous and new positions, as well as the implementation timeline.
In addition, the Companies (Amendment) Act 2017 makes it easier for troubled firms to restructure, giving them the additional flexibility to avoid the risk of liquidation.Improving Singapore’s Corporate Rescue and Restructuring Processes
With regard to schemes of arrangements, creditors will be granted greater protection due to increased scope of the statutory moratorium. A 30-day moratorium will also be automatically engaged upon the filing of an application. Courts will also be able to approve a scheme even if the requisite majority is not achieved, provided the dissenting class of creditors are not unfairly prejudiced. During judicial management, courts will be able to grant a judicial management order even if a secured creditor objects. With regard to winding up, provisions will be enacted to enhance Singapore’s capability in resolving cross-border insolvencies and increase its attractiveness as a centre for debt restructuring. These include, in particular, the proposed adoption of the UNCITRAL Model Law on Cross-Border Insolvency, as well as the abolition of the general ring-fencing rule in the winding up of foreign companies.